Brexit: If ‘no deal’ UK will set up f-gas system

The UK would adopt the EU F-Gas Regulation, but administer it through its Environmental Agency.

On 13 September 2018, the UK government confirmed that in the event of a ‘no deal’ exit from the European Union it would adopt the EU F-Gas Regulation – phasing down HFCs by 79% by 2030 (compared to 2009-12 levels) and adopting the bloc’s quota method and schedule – but administer it through the UK’s Environmental Agency (EA).

The UK needs to agree a deal with the European Union (EU) by 29 March 2019 if it wants to prevent a ‘no deal’ Brexit, which would mean no formal agreement over the EU F-Gas Regulation.

“Businesses that produce, import, or export HFCs or ODS or products and equipment pre-charged with HFCs or [ozone depleting substances] ODS would need to apply for [a] UK quota to place them on the UK market,” the UK government’s announcement explained.

“The current EU-wide HFC quota which companies receive would be split into two parts: one quota for placing on the UK market issued by the UK Government and another for placing on the EU market, issued by the EU Commission,” the government adds.

Companies will be notified by the EA, by the end of 2018, of their “UK reference value (the baseline for calculating annual UK quota values) and UK HFC quota for the period from 30 March 2019 to 31 December 2019,” the government explains.

The EA would administer HFCs placed on the UK market by establishing a new UK-based IT system that would not change the requirements currently faced by businesses (which would remain the same as the EU F-Gas Regulation). The only difference is that businesses must report to the UK instead.

The European Commission will calculate the quota to allocate to UK companies for placing HFCs on the EU market.

“UK companies would need to set up an office in the EU or appoint an ‘Only Representative’ there to remain eligible for the EU quota,” the government states. An ‘Only Representative’ is someone you appoint to administer import affairs.

“UK companies can set up an Only Representative in the EU before March 29 if they wish,” it said. Similarly businesses not based in the UK would need to appoint an ‘Only Representative‘ in the UK to be eligible for the British quota.

Can the UK ‘enforce’ F-Gas?

Concerns about the EA’s ability to control and enforce F-Gas Regulation were raised by an April 2018 report by the UK Parliament’s Environmental Audit Committee.

The report cites the UK Environment Agency’s “low number of investigations” and “single prosecution” of a breach in 2015 as evidence that little monitoring of HFC use is taking place in the UK.

The government did respond to this report in July 2018. It stated at the time that it would not reveal publicly how the EA monitors and investigates non-compliance, because this would undermine the Agency’s ability to do so. But it gave assurances that such monitoring is taking place.